Americans will pay more for gas after Trump's Iran move sends oil prices up

Americans are primed to pay more at the pump after President Trump dumped an accord with oil producer Iran.

Trump announced Tuesday that the U.S., which negotiated the 2015 deal to curb Iran's nuclear program with other international partners, was unilaterally pulling out and reimposing sanctions.

Advertisement

The price of a barrel of Brent crude hit more than $77 per barrel after the announcement, the first time it has reached that mark since 2014.

A surge in prices is good news for natural resource-dependant countries such as Russia and Saudi Arabia, though Americans will take a hit from the President's decision as prices are expected to rise even higher towards $80.

AAA's national gas price average was $2.82 as of early Wednesday, though states on the East and West Coasts ranged higher and New York's average was $2.96.

Gas prices have gone up steadily this year. A station in Englewood, N.J., is seen in April. (Seth Wenig/AP)

Prices that fluctuated last year have gone steadily upward since the beginning of 2018, when it became clear that Trump would scrap the deal.

Not only will that price affect individual drivers' wallets, but it is also expected to put a damper on the economic growth that the President loves to tout.

"For the U.S. economy, a prolonged rise in oil prices could reverse part of the benefits from the fiscal stimulus," Oxford Economics' Gregory Daco told CBS News.

It was not immediately clear what the U.S. would gain by backing away from the deal.

President Trump announced Tuesday that the U.S. was backing out of the international deal to curb Iran's nuclear program. (Olivier Douliery/TNS)

Also taking an economic hit from the Iran sanctions are U.S. allies in Europe, who have done business with Tehran since the lifting of restrictions and lobbied hard to keep Trump from inflaming conflict again.

The new Trump sanctions would make illegal actions from major companies such as Total, the French oil giant, and Airbus, the plane manufacturer, but those companies have hopes for waivers.

American plane manufacturer Boeing has also been forced to put plans to sell to Iran Air on hold.